Making the decision to become a co-signer is a heavy responsibility, especially when it involves a significant amount, such as a $900K mortgage. In many cases, if a bank or mortgage lender is hesitant about granting a loan to a borrower due to their credit history or income, they may suggest finding a co-signer. As a parent, you naturally want to help your child achieve their dreams, including owning a home. But before you put pen to paper, it's crucial to fully understand the implications of co-signing a mortgage.

What Does it Mean to Co-sign?

Co-signing involves lending your creditworthiness and financial stability to someone else’s loan application. If your child defaults on the mortgage, paying back the debt falls onto you. You're essentially promising the lender that you will if the primary borrower (your child) doesn't fulfill their financial obligation.

The Potential Risks

There are short-term and long-term consequences of co-signing a loan, which can affect your financial health and personal relationships. Here are a few risks to consider:

  • Credit Score Impact: Even if your child makes timely payments, the large loan amount will appear on your credit report. This can affect your debt-to-income ratio, making it challenging for you to secure loans for yourself in the future.
  • Financial Burden: Should your child face financial difficulties and fail to make payments, the responsibility falls onto you. This could mean a massive $900K financial burden.
  • Relationship Strain: Money matters can strain relationships. If things go south, your relationship with your child might have tension or conflict.

Benefits of Co-signing

While there are evident risks, there might be some benefits to co-signing your child's mortgage:
  • Helping Build Credit: By co-signing, you are allowing your child to build a positive credit history, assuming they make timely payments.
  • Achieving Homeownership Dreams: Your support could be the only way your child can step onto the property ladder, especially in competitive real estate markets.

Things to Consider Before Co-signing

If you're thinking about co-signing, here are a few things to keep in mind:
  • Your Financial Situation: Do a deep dive into your finances. Can you afford to pay off the loan if your child defaults?
  • Discuss With Your Child: Have an open conversation about their financial stability. It's essential to understand their plans for the future, job security, and any potential risks that might affect their ability to repay the loan.
  • Seek Legal Advice: It might be beneficial to consult with a financial advisor or attorney to understand all the legal implications and potential ways to protect yourself.
  • Alternative Options: Are there other ways you can help without co-signing? Consider contributing to a larger down payment or offering to pay for private mortgage insurance (PMI), making the loan less risky for the lender.


Co-signing your child's $900K mortgage is not a decision to be made lightly. While it can offer your child a leg up in the property market and a chance to build their credit, the potential risks to your financial health and personal relationship cannot be ignored. Thoroughly evaluate the situation, seek expert advice, and consider all options before making a final decision. Remember, as with all financial decisions, it's vital to ensure that you make the best choice for your unique situation.